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M/s Propene Products Ltd. Versus The Commissioner of Income Tax, Kanpur and another

2016 (7) TMI 409 - ALLAHABAD HIGH COURT

Computation of deduction under Section 80-IA - whether Assessing Authority has to calculate income of individual undertakings of assessee on the basis of unabsorbed business loss etc. in respect of each individual unit or it should be collectively'? - Held that:- In the present case, one Polymer Unit of the assessee has shown profit while Dairy Unit has shown loss and deduction was applied after absorbing loss of Dairy Unit. The approach of Revenue is clearly erroneous and contrary to the law la .....

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e to be taken into account but for the purposes of calculating the deduction of industrial undertaking, the loss sustained in another unit cannot be taken into account and only the profit shall be taken into account as if it was the only source of income of that unit. - In view of above, question formulated above is answered in favour of Assessee and against Revenue - Income Tax Appeal No. - 330 of 2006, Income Tax Appeal No. - 485 of 2012 - Dated:- 6-7-2016 - Hon'ble Sudhir Agarwal And .....

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07.2006 passed by Income Tax Appellate Tribunal, Lucknow Bench 'A' Lucknow in I.T.A. No. 190/LUC/2006 and I.T.A. No. 760//LUC/2001 and have been filed by assessee. 3. Though appeals were admitted on the questions of law framed therein which are five in number but in substance we find that only question up for consideration is; 'while computing deduction under Section 80-IA of Income Tax Act, 1961 (hereinafter referred to as 'Act 1961'), Assessing Authority has to calculate in .....

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et income after the adjustment of the unabsorbed business loss, investment allowances, depreciation, etc. The deduction under Sections 80HH and 80-I have been claimed before adjusting the unabsorbed business loss, depreciation and investment allowance of the earlier years amounting to ₹ 10,93,172/- on the basis of the profits of the two undertakings. The assessing authority proposed to adjust unabsorbed/brought-forward losses and allowances of all the three units. In appeal, the Commission .....

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f Income Tax (Appeal) held that Sections 80-HH and 80-I only refer the income derived from industrial undertaking, thus the income derived by the two manufacturing units are only to be considered for the purposes of the deduction. However, for the computation of the income derived by the industrial undertaking, the matter has been remanded back to the Assessing Officer. The Tribunal by the impugned order has upheld the view of the Commissioner of Income Tax (Appeals). We have considered the fact .....

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question for consideration is that whether deduction is eligible to the income derived to each industrial undertaking independently or on a consideration of the losses suffered by the service unit. Sections 80-HH and 80-I of the Act contemplate the deduction from the income derived by the undertaking. The CIT (Appeal) has rightly held that income of the undertaking shall be calculated on a consideration of an absorbed business losses, etc. in respect of each individual unit and thereafter on the .....

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